The Bizarre Breakfast Tax Break

Somehow, about six years ago somebody slipped a little loophole into the portion of the city code governing collection of Bend's transient room (hotel/motel) tax.

Somehow, about six years ago somebody slipped a little loophole into the portion of the city code governing collection of Bend's transient room (hotel/motel) tax. The loophole might not be big enough to drive a truck through, but it could be big enough for more than $400,000 a year to leak through.

That's how much Visit Bend, the local tourism promotion agency, estimates the city could lose in revenue if it retains a bizarre $10-per-room exemption for hotels and motels that offer a complimentary breakfast to guests.

We call the exemption "bizarre" because, in the first place, it doesn't appear to exist anywhere but Bend. Deschutes County doesn't have it. The state doesn't have it. None of the cities in Oregon or even on the West Coast apparently have it.

The exemption also is bizarre because it absolutely defies logic. Its supposed purpose is to make Bend lodging "more competitive" with other places by reducing the room tax that guests must pay. But at an average per-night room rate of $102, the savings from the breakfast exemption is only 90 cents - hardly enough to persuade somebody to vacation in, say, Lincoln City instead of Bend.

The arbitrary $10 figure also appears to have been pulled out of thin air. We're not in the hospitality business, but we're skeptical that it costs a hotel $10 to give somebody a bagel with a dab of cream cheese and a cup of coffee.

Finally, a complimentary breakfast has become just one of the standard marketing devices that hotels and motels use, like offering free wi-fi, a swimming pool and a workout room. If there's an exemption for breakfast, why not for all those other perks too?

Up to now, only seven local hotels are aware of the weird breakfast provision and are taking advantage of it. But now that the issue is out in the open, if the exemption is retained every hotel and motel in the city is going to use it. And Visit Bend calculates that if that happens it would reduce room tax revenue by more than $400,000 a year, of which some $322,000 would have gone to the general fund. That's a chunk of change that this financially crippled town definitely could use.

Almost as bizarre as the breakfast exemption itself is the way the city council is handling it. When the issue was first brought up in early June, all the councilors were nodding and agreeing that the exemption should be scrapped. But after being leaned on by some of the good old boys in the local hotel industry, three members of the council's Good-Old-Boy-and-Girl Club - Oran Teater, Tom Greene and Jeff Eager - started waffling. The scuttlebutt is that Mayor Kathy Eckman, the fourth member of the club, will join them on July 15 and vote to keep a version of the exemption in place.

The exemption - in any form - is stupid, unfair, against the public interest and thoroughly deserving of a prompt and vigorous BOOT. And so is any councilor who caves in to pressure and votes to keep it.

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